I thought some people might be interested in knowing that Epoch Partners initiated coverage of Siebel Systems as their best software idea last week, and you can download it for free on their site at www.epoch.com

What's more is that they did a CAP valuation analysis (Gorilla Game chapter 4) for Siebel and they quantified it along with laying out the framework in table format. Other than the report I wrote on Microsoft while I was at The Motley Fool, I am not sure of any other report that lays out a CAP analysis. So, for those interested in the mechanics of it, check it out.

The software reports at Epoch provide good background of the industry. I think they are generally weak on financial analysis. But, you can get that elsewhere.

Good to see that you've held on to a similar screen name. Perhaps you can give Paul lessons about how to do that. :)

I have run out of changes for a full 12 months so XaosSurfer it is for the next year. However, I might sign up over on SI under a different name. Something like, WhoTheHellCaresAboutValuationAndTimingBeingTheSameOrDifferent.

However, my unique 'style' and my liberal use of the Mark Twain spelling system would give me away in a flash.

I don't have the report in front of me, so I am not sure about the 0.7 PEG.

They keep shares outstanding constant at 520 million - that seems optimistic.

Yes, this is optimistic since there will likely be a lot of options that are still in the money which will be exercised. However, it is difficult to estimate. I sent the analyst a note saying that this fact skews the analysis, and at least needs to be considered in some manner -- if not explicitly.

However, the model looks great. What do you think of the MICAP idea?

Well, I don't want to comment on specific stocks, but in general, I think it's difficult to say if the MICAP is reasonable or not because technology markets change rapidly. But, if CRM plays out like databases, then there could be a lot of value creation for the dominant vendor.

It seems to be more applicable to stable businesses like Coca-Cola. If Coke's stock gets hammered because of problems in Europe, the MICAP goes down, but will Coke really stop creating value in say 12 years? Probably not. People are going to be thirsty 12 years from now, and Coke is still likely to have the most dominant franchise, cash flows, and profit margins.

I think this is much harder for technology companies. Epoch deserves credit for doing the analysis and laying it out very well. You just need to determine whether or not you think the assumptions are reasonable.

John,Having once been a loyal MF subscriber, upon discovering and switching to another site (Minyanville) as the storm began to brew three years ago, my parting words to the Fool were, "you might consider having at least one contrarian advisor on your staff, just for those of us who think the glass might be half empty."

While you have clearly been around a while (this is my first venture back) I am most glad to see your presence here. You almost make me want to return! Ha! And I will keep tabs on your opinions...